Foreign Affairs Debate

The third Presidential debate was the most uneventful so far. Although it was supposed to focus on foreign affairs, neither candidate seemed to want to discuss the subject at length. The questions of the moderator were so general and broad that both President Obama and Governor Romney had no difficulty in turning the debate to their major domestic concerns.

Both agreed that to be strong abroad, America had to be strong at home and that easily led to a discussion of their differing domestic agendas. It never occurred to either that weakness at home requires an even stronger and skillful foreign policy. After all, we are still facing enormous financial difficulties here at home.

Who really believes that the recession is over? Our debt is at unimaginable trillion levels and keeps increasing. China holds a considerable amount of that debt and the more we owe them, the more we are in their power. That is, unless we one day do the unthinkable and default on our own debt and bring down our economy as well as the Chinese.

We are also weak because we have stretched our military resources to the limit. We have been at war in the Middle East for over a decade and even though both candidates declare the troops will be out of Afghanistan in 2014, there is no guarantee that we have seen the last of Iraq and Afghanistan. We have armed and trained over 300000 Afghans. Who can say that they won’t be part of a Taliban resurgence?

I wonder if President Obama wouldn’t have done better if he had just brought our troops home after his election. There would have been a huge outcry but it would have largely been forgotten by now. Would the situation in the Middle East be any worse than it is now?

Speaking of bad situations I understand why both candidates are so alarmed at the possibility of an Iranian nuclear weapon, but I can’t understand why both showed no alarm at the fact that Pakistan has 100 nuclear weapons in its arsenal. Shouldn’t an object of our foreign policy be to dismantle Pakistan’s nuclear capacity? This is especially important given the fragility of Pakistan’s internal situation and the possibility that their nuclear weapons might one-day fall into the hands of terrorists.

Since we give so much money to Pakistan, shouldn’t an object of our diplomacy be to guarantee Pakistan’s security in exchange for an end to its nuclear program?

All in all, I think that Governor Romney showed that he is certainly adept in the area of foreign affairs. Even though the spin masters tried to give the edge to the President, I believe that the Governor will continue to gain in the polls. The President certainly didn’t help himself by his insulting references to ships that planes can land on, or others that can go underwater. Maybe, he has appeared on Leno and Letteman too many times. ###

Second Presidential Debate

Kerry Ladka: Libya question

Every commentator seems to agree that the second Presidential debate between President Obama and Governor Romney was the most contentious so far. Most also agree that President Obama made a much better showing than he did in the first debate. I admit being partial to Romney but sitting in my living room, I found it hard to say if either candidate had scored a clear victory.

In the first place, it bothered me that both candidates while being polite and attentive to the town hall questioners, tended to largely ignore the questions. I know that this is standard operating procedure, but both seemed less than genuine when they used a question to go off on a standard stump reply.

It made me think back to a sales meeting many years ago when a big shot from the home office visited our local office to deal with some pressing problems. He assembled us all in the meeting room and indicated that he had come to listen to our questions and problems and that he had no preconceived agenda. Then, he opened the floor to questions and in response to the first launched into a two-hour exposition of how he had achieved such success in his own career. Needless to say, there were no further questions after this ordeal.

Nevertheless, the debate contained some extraordinary revelations. At one point Governor Romney indicated that one of his goals was to eliminate the tax on savings and investment income for people making less than $200000 per year. President Obama did not pick up on this bombshell and since the debate I have seen no discussion anywhere.

Elimination of tax on savings and dividend income would mark a revolution in the personal finances of most Americans as well in the financial services industry. Tax deferred bonds would lose much of their luster for middle class America. Tax-deferred annuities would lose much of their reason for being. Even IRAs and other retirement plans would become less attractive. On the other hand, dividend-paying stocks would become even more attractive especially to Seniors. In a focus group right after the debate one older woman said that this issue alone would make her vote for Romney.

Again, I admit my anti Obama bias but even though he was more energetic, I can’t say that he made any memorable points. From the first, he went back to his original story line that his opponent was only interested in helping rich people and cared little for the middle class. In my opinion, the class warfare theme is getting weak.

I thought that Governor Romney did a creditable job but I believe he missed a golden opportunity on the Libya question. The question was asked by a man who later identified himself as a supporter of the President on social issues, but who admired Romney’s business skills. Here is the question he formulated with some of his buddies at work.

Question: We were sitting around, talking about Libya, and we were reading and became aware of reports that the State Department refused extra security for our embassy in benghazi, Libya, prior to the attacks that killed four Americans.

 Who was it that denied enhanced security and why?

President Obama was the first respondent and no one watching or reading the transcript later can honestly say that he answered it. He never said who denied the enhanced security or even admitted if it was denied. He certainly never got to the why.

Then it was Romney's turn. I know it's hard to react quickly when 60 million people are watching and so much is at stake, but at the moment here is what I thought he should have done. He should have approached the questioner, Kerry Ladka, an ordinary American citizen, to repeat the question. At that point he only had to say, "I can't answer your question, only the President can." ###

Vice-Presidential Debate

Vice-President Joe Biden

Traditionally, the Vice President of the United States is little more than a political figurehead holding an office that has virtually no power or responsibility. Who can remember the names of any one of Franklin Delano Roosevelt’s Vice-Presidents except for Harry Truman who would be forgotten today if he hadn’t assumed the Presidency on Roosevelt’s death?

Even though Lyndon Johnson was a master politician and a power in the Senate for years, no one has ever claimed that he was picked as JFK’s running mate because of his ability. He was chosen mainly to help secure Texas for the Democrats. After the election he was never in the Kennedy inner circle and only cruel fate elevated him to the Presidency.

No one would argue today that Vice-President Al Gore played a key role in the two Clinton administrations. On the contrary, it appears as if Clinton and Gore couldn’t stand each other. In 2000 President Bush’s choice of Dick Cheney bucked the trend. He was hand picked by Bush and no one would deny that Cheney played a key role for better or worse in the two Bush administrations. Some even believe that he was the real power behind the throne.

In 2008 candidate Barack Obama and his closest advisors went back to normal. To offset Obama’s race, youth, and inexperience they chose a venerable old party hack, Senator Joe Biden, as running mate. Is there any one who believes that Biden has played a key role in the Obama administration during the past four years? In fact, he has been such an embarrassment that there was even talk of dropping him from the ticket this year.

Nevertheless, there he was up on the stage the other night for the traditional Vice-Presidential debate with Republican challenger, Paul Ryan. As many have pointed out, his behavior was annoying but what he said was even more annoying. He was going to play the role of the wiser older man who would put the young whippersnapper into his place. For example, he tried to pull a Lloyd Bentsen and try to induce Ryan into equating himself with John Kennedy. It fell flat.

Biden threw a number of low blows. He must have had his staffers pore through the files until he found a couple of letters that young Representative Ryan had written to him. He was really scraping the bottom of the barrel. He also mentioned that Ryan had requested stimulus funds for two of his constituents as if it was somehow reprehensible. Was it really on the same level as Solyndra? Moreover, had Biden never done it himself during a long career in the Senate that turned him into a multi-millionaire?

What a despicable person. He even had the nerve to introduce the tragic death of his first wife into the debate. When Martha Raddatz, who did a fine job as moderator, asked him about negative ads, it is no wonder that Biden evaded the question. 

Just a word about Congressman Ryan. Frankly, I thought he could have done a better job. He should have ignored Biden for the most part and concentrated on the sorry record of President Obama. ###

Romney's Tax Plan

     

I would like to put my two cents worth into the almost interminable comment on last Wednesday’s Presidential debate. In the first place, even though I have never been a supporter of President Obama, I do not think that he gave as bad an account of himself as both sides have suggested. To me he appeared to have grown and matured in office into something much more than the inexperienced but charismatic community organizer of four years ago.

On the whole, despite disagreeing with most of what he said, I thought the President did a good job but he was simply overwhelmed by the knowledge, experience, competence, and conviction of Gov. Romney. Romney showed that not only did he belong on the same stage as the President of the United States, but that he also belonged in the Oval Office.

On one occasion the President said that it’s just arithmetic or math. Nevertheless, few ever bother to do the math when trillions of dollars are involved. For example, the President as well as most commentators did not appear to grasp what Romney was getting at when he suggested that cutting tax rates was not the same thing as cutting taxes. Let’s look at Romney’s claim that cutting tax rates would not reduce Federal revenues but actually might increase federal revenues.

Federal tax rates use a graduated scale. There are currently six different tax rates: 10%, 15%, 25%, 28%, 33%, and 35%. Here’s how it works. Everyone pays 10% of the first $8700 of taxable income. Income from $8700 to $35350 is taxed at the 15% rate. The tax rate on income from $35350 to $85650 is then taxed at the 28% rate, and so on until the 35% rate is applied to income over $388000.

So, let’s use as an example, an unmarried taxpayer with a taxable income of $85650. Remember, taxable is adjusted gross income minus personal deductions. On the approximately $50000 of taxable income over $35350, this taxpayer would currently pay the 25% rate or $12500. Romney proposes reducing tax rates by 20%, which would bring our taxpayer’s rate down to 20% thereby reducing his tax to $10000. Romney’s plan would save our taxpayer $2500. Multiply that by millions of taxpayers and it adds up.

However, Romney proposes to offset that reduction by eliminating or scaling back some tax deductions or tax credits. Suppose the above taxpayer had a $20000 tax deduction for mortgage interest and real estate taxes. If he was only able to deduct half that amount, he would owe an additional $2500, thereby neutralizing his savings from the reduction in his tax rate.

If the taxpayer’s bill remains the same, and the government collects the same amount of tax, why even bother? In the first place, there is a question of fairness. A tax deduction is worth much more to a taxpayer in the 35% bracket than to one in the 15% bracket. Even Democrats don’t object to this inequity that favors the wealthy.

More importantly, lowering tax rates does stimulate the economy. Gov. Romney tried to explain it last Wednesday and I hope that his running mate will continue in the next debate. History is on their side.

Over 50 years ago, President Kennedy lowered tax rates and Federal revenues grew dramatically. President Reagan did the same thing with the same result when he took office. Finally, even the much-maligned Bush tax cuts did not reduce Federal revenues. In 2002 the government collected 1 Trillion dollars in income taxes and 1.88 Trillion in total revenues. By 2007 Federal income tax collections went up by 50% to over 1.5 Trillion dollars, and total government receipts exceeded 2.5 Trillion. In 2007 the total federal deficit was 160 Billion dollars, the same it had been in 2002. Only with the recession did income tax revenues go down to 2002 levels although total government receipts stayed higher.

Two final notes on the first debate:

First, commentators were shocked that President Obama did not bring up Gov. Romney's 47% comment. I can only guess that the President's advisors must have felt that Governor Romney was prepared to knock that one out of the park. Any major leaguer will knock a 95 mph fastball out of the park if he knows it's coming.

Second, I though that veteran newscaster Jim Lehrer did a fine job of moderating. He allowed the focus to stay on the candidates and kept himself in the background. It was the best debate I have ever watched, and Lehrer had a lot to do with it. ###